Personality and national culture: Predictors of compensation strategy preferences in the United States of America and India

Abstract

Purpose

The purpose of this paper is to examine the relationships between individual personality and compensation package preferences and whether cross‐cultural differences exist in these preferences in the USA and India.

Design/methodology/approach

A survey methodology was used and subjects included 175 MBA students of two universities, one in the USA and one in India. Measurement instruments included a Big Five personality measure and a compensation pay strategy typology.

Findings

Results indicated a significantly different pattern of results between subjects in the two countries. In the India sample, introversion was a significant predictor of a security/commitment pay strategy and extroversion and neuroticism were significant predictors of performance‐driven pay strategies. In the US sample, none of the personality variables was predictive of pay strategy preferences.

Practical implications

Multinational firms should reconsider “one‐size‐fits‐all” compensation plans and tailor strategies to fit the profile of their workforce.

Originality/value

The paper provides empirical data indicating that relationships exist between personality and pay package preferences, and that these relationships differ by culture.

Citation

Westerman, J.W., Beekun, R.I., Daly, J. and Vanka, S. (2009), "Personality and national culture: Predictors of compensation strategy preferences in the United States of America and India", Management Research News, Vol. 32 No. 8, pp. 767-781. https://doi.org/10.1108/01409170910977988